As labor talks gear up, Harley reports smaller loss

[Johnj]

Harley-Davidson reported a smaller fourth-quarter loss than expected, sparking a rally in its stock price Tuesday.

Harley released its financial results as it prepared for negotiations with union workers at its Kansas City plant. The current contract expires in July 2012.

The Kansas City plant “has to become more competitive and flexible if those operations are to remain viable,” Harley said in a statement Tuesday. “The company expects to make a decision on the future of the Kansas City operations in early March 2011.”

Harley’s stock jumped 8 percent Tuesday and closed at $39.43 a share.

Negotiations officially will begin today, said Tony Wilson, president of Machinists Local 176 at the Kansas City plant. He declined to comment further until hearing specific proposals from the company.

In late 2010, Harley said that without a revamped agreement, operations in Kansas City could be moved to its York, Pa., plant. The company has negotiated new contracts with its York and Wisconsin facilities, similar to what Harley said it would seek in Kansas City.

The union said the company was seeking about $25 million in annual cost savings at the Kansas City factory.

In the 2010 fourth quarter, Harley lost $46.8 million, or 20 cents a share. Its year-ago loss was $218.7 million, or 94 cents a share. Fourth-quarter revenues were up sharply at $917.1 million compared with $764.5 million in 2009.

Harley posted a 2010 profit of $146.5 million, or 62 cents a share.

Read more: http://www.kansascity.com/2011/01/25/26 ... z1Ck5DLAQD